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definitely GIMP, runs on any OS, its free, its small, its just as powerfull if not more powerfull then photoshop (depends on opinion) and has endless plug-ins and scripts. take a couple of tutorials to get used to the interface, specially if you are photoshop veteran. i think theirs a plugin that makes gimp's interface look just like photoshop if your used to that interface. but yah get GIMP

If you use a mac, get your self a copy of Aperture, easy and fast to use plus you can edit in full screen with no annoying boxes around the edge of your photos! you can learn all the basics in about 30mins and if you have a whole bunch of photos taken under the same conditions, you can edit the first pic then apply those changes to all the rest. down side is it's only for Mac, sorry PC users. You have my sympathy.

Lightroom is pretty good.. 1.4 has some neat features - you can do some basic post processing - adjusting the levels and white balance and such.. but it also allows you to create presentations, and a website to publish your photo's.. very handy if you want to show your friends - or knock together an online portfolio.

LightRoom 4.0. Love it and they made it cheaper than the previous 3.0! Allows for great noise reduction on high ISO pictures (indoor sport for instance), sharpening, adjusting highlights and shadows. Brilliant tool if you don't need the extra features of Photoshop.